Satyam Chairman R. Raju.The beleaguered IT giant, already under scanner over the aborted acquisition of firms promoted by the Chairman's family, received a rude shock days ahead of its January 10 board meeting, with Raju stepping down along with his brother and Managing Director B Rama Raju.
"It was like riding a tiger, not knowing how to get off without being eaten," Ramalinga Raju said in a letter to Satyam's board of directors, wherein he listed major financial wrong-doings over the years to inflate the profits.
Listed at New York Stock Exchange, the company could face regulatory action in the US, analysts said.
While Raju recommended DSP Merrill Lynch be entrusted the task of "quickly exploring some merger opportunities," the company informed the stock exchanges that the investment banker has terminated its engagement with Satyam.
Noting that every attempt to eliminate gaps in balance sheet, purely on account of inflated profits over several years, failed, Raju said, "I am now prepared to subject myself to the laws of the land and face consequences thereof."
Low percentage of promoter equity in the company, where four independent directors resigned in the last two weeks over the acquisition fiasco, could lead to a takeover and expose the gap, he said in the letter, also sent to regulator SEBI.
Raju will continue as Chairman till the Board finds a replacement, even as speculation was rife that Satyam President Ram Mynampati would take over as Chairman. Rama Raju would also continue as Managing Director, but only till the time the Board is expanded.
Ramalinga Raju requested the Board to "hold together" to take some important steps, while hoping that one of the Board members T R Prasad was "well-placed to mobilise support from the government at this crucial time."
Satyam is the country's fourth largest IT firm and has has over 51,000 employees.
Meanwhile, in a latest development Satyam has appointed Ram Mynampati as interim CEO
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